If you are considering bankruptcy, you face many issues, and you are uncertain of any benefits bankruptcy may offer. In addition to releasing themselves from debt every day, bankruptcy has many other benefits. But does hurting your credit record for 7 to 10 years also have any additional benefits?
Before reaching a final decision, it is important to examine a variety of factors. There are always alternatives available, but selecting the most appropriate one is not always simple. The following are some of the advantages that might assist consumers in making difficult selections that are suitable for them. Although benefits are not usually the determining factor, they may certainly assist you in making an informed selection.
Automatic Stay
When a consumer files for Chapter 7 or Chapter 13 bankruptcy, a petition is filed, and there is what is known as an automatic stay, which forces creditors to halt all collection operations as a result of the filing of the bankruptcy petition. This implies that once they have been informed of your plans, they must cease phoning, leaving messages, or mailing you notices immediately. If creditors’ efforts to collect debts persist, the judicial system may impose penalties on them. An attorney is the most appropriate person to handle this sort of issue. We have bankruptcy attorneys accessible for a free consultation to address any and all questions that you may have about filing for bankruptcy. They will assist you in understanding the benefits that may be obtained through Chapter 7 and Chapter 13 bankruptcy. Each form of bankruptcy has its own set of benefits and drawbacks, which are detailed below.
A Fresh Financial Start
Another significant advantage of filing for Chapter 7 bankruptcy is the opportunity to get a fresh financial start, which should be taken into consideration when determining whether or not filing for Chapter 7 is the right option for a consumer. Chapter 7 bankruptcy is a preferable choice for debtors who have little or no property and a large number of unsecured obligations, according to the Federal Reserve. You have the option of deciding which debts you want to discharge via Chapter 7 bankruptcy. This covers debts that are secured as well as unsecured. Unsecured debts include things like medical expenses and credit card balances, among other things. An example of a secured debt is when you have opted to use collateral, which can include your home or automobile, as well as other important assets that you possess. Chapter 7 bankruptcy is also known as liquidation in some circles.
Disadvantages
Nevertheless, Chapter 7 bankruptcy is not a perfect option, as there are several unsecured obligations that do not qualify for Chapter 7 bankruptcy, including the majority of student loan debt. Please feel free to ask questions of your bankruptcy attorneys. Consumers who qualify for Chapter 7 bankruptcy may be able to have their debts dismissed or forgiven, depending on their circumstances. When a secured debt is incurred, the creditor has the right to collect the obligation by seizing and selling specific assets of the debtor if the debtor fails to make payments as agreed.
Customers who have a regular source of income secured obligations, and do not wish to lose their property will find that Chapter 13 bankruptcy is a more advantageous option. Using Chapter 13 bankruptcy, the consumer can submit a repayment plan to the bankruptcy court that will allow them to repay the debts that have been secured over a three- to five-year period of time. This implies that the customer will not lose possession of the things that were used as collateral to finance the debt. Despite this, each individual’s circumstance is unique, and it is necessary to analyze each case before determining which kind of bankruptcy is most suited to their particular needs.
Other Possibilities
The customer who decides to file for bankruptcy under Chapter 7 or Chapter 13 must attend certain programs. The customer is obliged to take lessons on credit counseling and debtor education before receiving any services. In addition to assisting you in determining what went wrong, this benefit will also assist you in developing new methods of budgeting, paying bills, and spending your cash so that you do not run into the same financial difficulties again in the future. Classes also include how to protect yourself from identity theft, as well as how to read and monitor your credit report, among other things.
Employment Opportunities After Bankruptcy
Bankruptcy does not necessarily mean that consumers will lose their jobs as a result of their bankruptcy filing. Furthermore, bankruptcy laws prevent companies from terminating employees solely because the employees have filed for bankruptcy. For a period of time following the bankruptcy filing, you may not be able to find a new job.
The Law Offices of John E. Mufson serves all of South Florida and can help you with these stressful issues. Call us today at 561-272-1003 or contact us online to get started.